25 November 2020: Quick march

Whilst there are conflicting signals in the markets, both bearish and bullish, export demand from SE Asia has the whip hand and has lifted the market a modest €10 on both whey and skim this week. And until we see a fundamental change in direction, this trend is likely to continue upwards into December and probably over the year end.

We may see a traditional dip in Q1, if the middle market decides to short-sell, but as skim has now found its equilibrium after the intervention sting of 2018, and whey has bottomed out on this cycle, the corridor of oscillation is hopefully narrower. All deals are off, though, if soya keeps rampaging upwards until S American new crop. And even bigger than that is elephant in the room, no-deal Brexit tariffs of £58/tonne on sweet whey and £610/tonne on calf milk replacers ...

BDC agri is the UK broker for Lacto Production milk and whey powder products.

For further information and prices, contact Greg Dunn on 01206 381521 or g.dunn@blackdiamondcommodities.com

19 November 2020: Demand kicks in

Prescience isn't my strongest suit, but last week's caveat about demand kicking in has come true short order. Despite plentiful sweet whey availability from cheese production going full chat, and restaurants and canteens closed across Europe, extra demand has kicked in from both export and domestic markets, and whey and skim are both up €20 in Holland. The other reason is bullish overspill from raging soya, palm and coconut markets - to quote a trading aphorism I learnt four decades ago, when something shoots up in price, buy the market that hasn't. Putting off buying decisions in pre-Brexit Britain is unlikely to yield future savings, and the factory is already booked out until 20th December anyway.

The Pound has been buoyed by higher than expected inflation figures, and briefly ventured above €1.12 for an hour or so yesterday.

BDC agri is the UK broker for Lacto Production milk and whey powder products.

For further information and prices, contact Greg Dunn on 01206 381521 or g.dunn@blackdiamondcommodities.com

12 November 2020: At last, some movement

Downwards, despite some bullish factors. The fundamentals are unaltered, in that there is plentiful supply of whey from continued buoyant cheese production and skim from now abundant milk supply. However, the regenerated pig feed market in China that is driving the soya market through the roof is consuming large quantities of whey, and potentially slowing the decline in prices.

However, one factor that counters Chinese support is the weak US dollar, indicating that European whey markets could fall a deal further, as America may well dump excess whey now the S E Asia market has returned. Lacto Production have doubled their business for whey and milk replacers in S Korea, Thailand, Myanmar, Vietnam, Philippines and Japan so far this year, so the regeneration of the pig industry on top of robust demand for dairy could turn the milk powder markets round quite smartly.

Byproducts and co-products remain in short supply, as whey permeate is still in demand by edible markets, and whey protein concentrate remains unattractively dear.

It’s been quite a week for the Pound, and I won’t comment further than mentioning a headline I saw in the Ayrshire Daily News that neatly reprised their 2016 headline - ’South Ayrshire golf club owner loses 2020 presidential election’

BDC agri is the UK broker for Lacto Production milk and whey powder products.

For further information and prices, contact Greg Dunn on 01206 381521 or g.dunn@blackdiamondcommodities.com